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Government uncovering the cover-up culture

Since #MeToo brought non-disclosure agreements (NDAs) into the spotlight in late 2017, there has been a flurry of activity from government committees and regulatory bodies seeking to implement change. The most recent activity is a government response on proposals to prevent the misuse of confidentiality clauses that was published at the end of last month.
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Government uncovering the cover-up culture

SMCR optimisation and final rules

The Senior Managers and Certification Regime (SMCR), which was introduced in 2016 to increase the accountability of individuals working in the banking sector, will be extended to the wider financial services industry on 9 December 2019. In preparation for this wider remit, the Financial Conduct Authority (FCA) launched a consultation on its proposed changes to “optimise” the regime. Its final policy statement was published on 26 July 2019.

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SMCR optimisation and final rules

Tribunal issues different decisions for different contracts in IR35 ruling

In the case of George Mantides Ltd v. HMRC [2019] TC07202, a personal services company (the Company) appealed against tax and NIC assessments under the IR35 rules. The First Tier Tribunal (FTT) determined that there were sufficient differences between two engagements for the provision of services for IR35 to apply to one engagement and not the other.

The Company was providing the services of its director, George Mantides, to two hospitals – Royal Berkshire Hospital (Royal) and Medway Maritime Hospital (Medway). At both hospitals, Mr Mantides was a locum urologist. He saw patients according to a rota, ordered and reviewed x-rays, carried out minor surgical procedures and used facilities and equipment provided by the hospitals. Mr Mantides had sufficient expertise to carry out the work with minimal direct supervision and was only required to attend one regular meeting. Both engagements were for a consecutive period of three months, although both were terminated early. There were no agreed provisions for sickness, pension, holiday pay or travel expenses – other than between sites. The Company invoiced hourly and paid for professional indemnity insurance.

In its judgment, the FTT noted the following decisive factors:

• Substitutes: The Company had a written contract with Medway detailing the right to supply a suitably qualified substitute for Mr Mantides. Medway had no right of veto over this. In contrast, there was no written contract between the Company and Royal. The “Locum Booking Confirmations” provided in relation to this engagement made no mention of substitutes.

• Notice: The contract between the Company and Medway could be terminated on one day’s notice. The FTT inferred a requirement of one week’s notice from Mr Mantides’ comments about holiday absences at Royal.

• Hours: Medway was under no obligation to provide Mr Mantides with any hours. The FTT inferred (referring to the Locum Booking Confirmation documentation) that Royal would endeavour to provide Mr Mantides with 30-40 hours of work each week.

Under IR35, it is necessary to consider the terms of a hypothetical contract between the worker and the end client. The question was whether, under each of these hypothetical contracts, Mr Mantides would be considered employed by the relevant hospital or self-employed. The court held that the hypothetical contract with Royal had the characteristics of employment, and the hypothetical contract with Medway, self-employment. Consequently, the Medway contract was not caught by IR35, but the Royal contract was. This case provides an important illustration of some of the factors which will be considered by a court or tribunal in determining the scope of IR35. In this case, it worked in Medway’s favour that there was an express contract detailing the terms of engagement more specifically than the documentation detailing the relationship between the Company and Royal.

Tribunal issues different decisions for different contracts in IR35 ruling

Magistrate who said same-sex adoption not in best interests of a child loses discrimination claims

A Christian magistrate who publicly disapproved of same-sex adoption has lost his claim for religious discrimination and victimisation.
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Magistrate who said same-sex adoption not in best interests of a child loses discrimination claims

Whistleblowing protection: when will a complaint be protected as a qualifying disclosure?

In order to be protected against detriment or dismissal under whistleblowing law, a worker must have made a “qualifying disclosure”. A qualifying disclosure is any disclosure of information which:

• is, in the reasonable belief of the worker, made in the public interest; and

• tends to show that one or more of six specified types of wrongdoing has taken place, is taking place or is likely to take place. The six specified types of wrongdoing include a “failure to comply with a legal obligation”.

As long as the worker reasonably believes that the wrongdoing has occurred it does not matter if that belief later turns out to be wrong.

In Elysium Healthcare No 2 Ltd v Ogunlami UKEAT/0116/18 the Employment Appeal Tribunal (EAT) took a look at the ingredients of this test.

Mr Ogunlami was employed by Elysium as a health care assistant, working on one of its specialist programmes for patients detained under the Mental Health Act. He brought a whistleblowing claim, arguing that he had suffered a number of detriments as a result of having made a series of complaints regarding his supervisor, Ms Miles. The complaints concerned Ms Miles’ conduct in relation to certain patients.

Mr Ogunlami was successful in his claim at first instance. Elysium appealed to the EAT, arguing that the complaints did not amount to qualifying disclosures because Mr Ogunlami had not provided sufficient evidence that his complaints tended to show a breach of a legal obligation. In addition, Elysium argued that the public interest element of the test was not satisfied.

The EAT dismissed Elysium’s appeal. In the EAT’s view, it was apparent that Mr Ogunlami’s complaint amounted to an allegation that Ms Miles was guilty of a breach of a legal obligation – notwithstanding the fact that he had not said this in express terms. It was clear on the evidence that he viewed her behaviour as more than morally wrong or contrary to guidance. He had referred to Ms Miles’ conduct as being a disciplinary matter, a breach of company policy and a safeguarding issue. Not all breaches of policy will amount to breach of an employment contract but, in the EAT’s view, typically they will do so. The evidence was therefore enough to establish a belief on the part of Mr Ogunlami that the information in his complaints tended to show a breach of a legal obligation, namely the breach of an employment contract. The EAT was also concerned to emphasise that whistleblowers should not be expected to use precise legal terminology.

Looking at the public interest element of the test, the EAT was again unpersuaded by Elysium’s arguments. It determined that the mistreatment of vulnerable members of society readily satisfied the public interest requirement.

The public interest test was introduced in order to address the perceived problem of employees bringing whistleblowing claims based on alleged breaches of their own employment terms. The precise boundaries of the public interest test continue to develop. This case is an important reminder that anything capable of amounting to a breach of an employment contract, which also has a public interest element, may still amount to a qualifying disclosure. Where there is the potential for this protection to be triggered it will be important for employers to be particularly careful about how they manage and treat employees who have blown the whistle.

Whistleblowing protection: when will a complaint be protected as a qualifying disclosure?

Update

This blog is now called the People, Reward and Mobility Hub! Visit ‘Who we Are‘ for more information and keep visiting for the latest updates in employment, pensions and immigration.

Update

Proposal to make redundancy for expectant and new mothers redundant

A 10-minute Rule Bill was introduced in the House of Commons last month by the Chair of the Women and Equalities Committee to enhance the protections for expectant and new mothers against redundancy. The Pregnancy and Maternity (Redundancy Protection) Bill 2019 seeks to prohibit redundancy from the point a woman notifies her employer she is pregnant, until six months after the conclusion of her maternity leave.

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Proposal to make redundancy for expectant and new mothers redundant

Can a transfer of clients’ investments amount to a transfer of undertakings?

In Dodic v. Banka Koper and Alta Invest (Case c-194/18) EU:C:2019:385, the ECJ was asked to consider whether the transfer of intangible client investments from one undertaking (which had ceased investment services activity) to another could constitute a transfer of an undertaking for the purposes of the Acquired Rights Directive. It determined that it could in principle, but the question of whether there actually had been such a transfer in this case was remitted to the national court to decide. Banka Koper (Banka) ceased operating as a stock exchange intermediary. Banka transferred these activities (as it was obliged under Slovenian law) to another intermediary, Alta Invest. It was agreed that Banka would work for Alta Invest as a dependent stock exchange intermediary. Banka therefore informed its clients that, as Banka would be ceasing investment services operations, they could transfer their accounts to Alta Invest for free. A large majority of Banka's clients therefore transferred over to Alta Invest. As a result of ceasing these activities, Banka dismissed all its employees in its investment services office. Mr Dodic, who was one of the dismissed employees, claimed that there was a transfer of undertakings and that his employment should have transferred to Alta Invest. The case went all the way to the Slovenian Supreme Court which asked the ECJ to consider whether there had been a transfer of an undertaking even though: • Banka's clients could have transferred their investments to an intermediary other than Alta Invest; and • Banka continued to operate as a dependent stock exchange intermediary and co-operated with Banka. The ECJ found that the transfer of financial instruments from one undertaking to another following the ceasing of the former's business could constitute a transfer of an undertaking for the purposes of the Acquired Rights Directive. This was subject to the usual requirement that it had retained its identity post transfer (i.e. that there was a transfer of clients). This was, however, a matter for the referring national court to decide. The fact that the clients could choose to move their investments elsewhere and that Banka continued to operate as a dependent stock exchange intermediary was irrelevant.
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Can a transfer of clients’ investments amount to a transfer of undertakings?

Adverse treatment of a gay head teacher found to be constructive dismissal and sexual orientation discrimination

In The Governing Body of Tywyn Primary v. Mr M Aplin UKEAT/0298/17/LA the EAT held that the adverse treatment of a gay head teacher amounted to constructive dismissal and sexual orientation discrimination.
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Adverse treatment of a gay head teacher found to be constructive dismissal and sexual orientation discrimination

Acas publishes guidance on workplace neurodiversity

Acas has published guidance to help employers learn about neurodiversity and to suggest changes that can be made in the workplace to better support neurodivergent staff.
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Acas publishes guidance on workplace neurodiversity